Do you lose your house in bankruptcy?
If you do not have significant home equity and the mortgage on your home is still current, you will not lose your house if you file for Chapter 7 bankruptcy.
Most people who file Chapter 7 bankruptcy are able to retain all of their assets, which can include your house. However, if you are facing foreclosure, you might want to pursue a different route for filing bankruptcy, such as filing Chapter 13 bankruptcy instead.
If you are filing Chapter 7 bankruptcy and are worried about losing your house in Rutherfordton and other assets, you can work with a Rutherfordton bankruptcy lawyer to help you retain as many assets as possible.
Chapter 7 Bankruptcy Can Help People Retain Their Assets
Chapter 7 bankruptcy is a method to retain most or all your exempt assets, and all non-exempt assets may be used to pay off debts to creditors. Because this bankruptcy chapter does not include a repayment plan, this filing may be more suitable for people who are up-to-date with their mortgage payments and can continue paying their mortgage payments after filing.
If you are facing potential foreclosure, your lawyer might suggest filing Chapter 13 bankruptcy instead, as this method can help you catch up with payments you fell behind on and offer a payment plan over three to five years.
With both Chapter 7 and Chapter 13 bankruptcies, you might also be able to claim certain exemptions that can help you retain more assets and property in bankruptcy.
Ask Your Lawyer About North Carolina Bankruptcy Exemptions
Different states might allow certain exemptions when filing for bankruptcy, so it may be in your interest to ask your lawyer which exemptions you might qualify for. Bankruptcy exemptions can help people retain some or most of their assets when filing Chapter 7 bankruptcy, or it can serve as a way to refinance your debts if you are filing Chapter 13 bankruptcy. Your lawyer may go into more detail and explain which bankruptcy filing might be more suitable for your financial situation.
In North Carolina Cases, debtors are usually prohibited from using the federal bankruptcy exemption system. To accommodate this barrier, people who want to file for bankruptcy may use state exemptions to help them. Below are two aspects of North Carolina exemption law that might help you not lose your house if you file Chapter 7 bankruptcy.
The North Carolina Homestead Exemption
In Rutherford County, you might be able to use the North Carolina Homestead Exemption to help you protect your home. According to this exemption, you may be able to exempt $35,000 of equity in your home.
Both spouses may be filed in the same application. However, if another individual also owns the house, they may file separately if they qualify for the exemption.
Also keep in mind that if you were temporarily absent from the home, that does not mean you are disqualified from the exemption. If your absence was due to health issues, and if your address is still your permanent residence, you may still qualify.
If you are married, you might want to consider taking advantage of “doubling” exemptions in the North Carolina law. Doubling allows each spouse to claim their full bankruptcy exemption of $35,000 for a total of up to $70,000 of home equity. This action can be a viable option to help married couples retain most or all of their assets.
However, there is an exception to this exemption. Though married couples might have joint custody of most items, if the house deed is only in one spouse’s name, only that person can claim home equity on it.
That being said, North Carolina General Statutes (GS) §1C-1601 provides a full list of property exemptions that an individual or both spouses may claim when filing for bankruptcy.
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Hire Farmer & Morris Law, PLLC, to Work on Your Bankruptcy Case
Still have more questions about Chapter 7 bankruptcy? Call Farmer & Morris Law, PLLC, at (828) 286-3866 to speak with one of our law firm representatives and learn more about what the filing process for bankruptcy might entail. A representative can explain in more detail what happens to your property after filing Chapter 7 bankruptcy.